Springer Nature is making Coronavirus research free. View research | View latest news | Sign up for updates

Application of the Faustmann principle to a short-rotation tree species: an analytical tool for economists, with reference to Kenya and leucaena

  • 72 Accesses

  • 4 Citations


Attention has increasingly focussed on fast-growing trees as a potential means of slowing high rates of deforestation and as a source of renewable energy. Unfortunately, the analytical tools for determining economic tractability of tree-growing projects lags behind the popular support to implement them. This paper brings the methodology of the Faustmann Principle, which was established for use with longer growing species, to bear on leucaena, a short-rotation, leguminous tree crop. The principle incorporates biological and economic parameters to derive a function relating the present value of net revenue to rotation length. Additionally, a method of incorporating secondary benefits, such as nitrogen fixation, is demonstrated. Results from the model are applied to Kenya. Research on agro-climatic zones in Kenya is used to indicate the potential volume of leucaena production.

This is a preview of subscription content, log in to check access.


  1. 1.

    Ahmad N and Ng FSP (1981) Growth ofleucaena leucocephala in relation to soil Ph nutrient levels and rhizobium concentration. Leucaena Research Reports 2: 5–7

  2. 2.

    Blandon P (1985) Agroforestry and portfolio theory. Agroforestry Systems 3: 239–249

  3. 3.

    Brewbaker JL (1987) Leucaena: a multipurpose tree genus for tropical agroforestry. In: Steppler HA and Nair PKR, eds, Agroforestry: A Decade of Development, pp 289–323. ICRAF, Nairobi

  4. 4.

    Coleman DC, Oades MJ and Vehara G (1989) Dynamics of soil organic matter in tropical ecosystems. NIFTAL/Department of Agronomy, University of Hawaii, Mimeo

  5. 5.

    Dvorak KA (1990) Final project report: Adoption potential of alley cropping. Resource Management Research (Resource and Crop Management Program). International Institute of Tropical Agriculture, Ibadan, Nigeria, Mimeo

  6. 6.

    Ethėrington DM and Matthews PJ (1987) Economics for agroforestry. In: Ester Z, ed, Professional Education in Agroforestry: Proceedings of an International Workshop. ICRAF, Nairobi

  7. 7.

    — (1983) Approaches to economic evaluation of agroforestry farming systems. Agroforestry Systems 1: 347–360

  8. 8.

    International Monetary Fund (various issues 1983–1991) International Financial Statistics. Washington DC

  9. 9.

    Gamponia V and Mendelsohn R (1987) The economic efficiency of forest taxes. Forest Science 33: 367–378

  10. 10.

    Hosier RH (1989) The economics of smallholder agroforestry: two case studies. World Development 17: 1827–1839

  11. 11.

    Hu TW and Kiang T (1982) Wood production of spacing trial of leucaena in Taiwan. Leucaena Research Reports 3: 59–61

  12. 12.

    Hu TW and Shih WC (1982) The growth of different varieties of Leucaena in Taiwan. Leucaena Research Reports 3: 62

  13. 13.

    Jen I (1988) An economic analysis of plantingleucaena leucocephala in Taiwan. The International Tree Crops Journal 5: 179–189

  14. 14.

    Johannson PO and Löfgren KG (1985) The Economics of Forestry and Natural Resources. Basil Blackwell, Oxford

  15. 15.

    National Research Council (1984)Leucaena: Promising Forage and Tree Crop for the Tropics, 2nd ed. National Academy Press, Washington DC

  16. 16.

    Ngambeki DS (1985) Economic evaluation of alley cropping leucaena with maize-maize and maize-cowpea in Southern Nigeria. Agricultural Systems 17: 243–258

  17. 17.

    Samuelson P (1976) Economics of forestry in an evolving society. Journal of Economic Inquiry 14: 466–492

  18. 18.

    Sombroek WG, Braun HMH and van der Pouw BJA (1982) Exploratory Soil Map and Agro-climatic Zone Map of Kenya, 1980, Exploratory Soil Survey Report No. E1, Kenya Soil Survey. Cartoprint, BV, The Netherlands

  19. 19.

    Stone SW (1991) A bioeconomic model ofleucaena leucocephala in Kenya. M.S. Thesis. Department of Agricultural Economics, Cornell University

  20. 20.

    Trees for the Future (1990)Leucaena leucocephala: The miracle tree. Trees for the Future: Silver Spring, MD. Mimeo

  21. 21.

    Van den Beldt RJ and Brewbaker JL (1980)Leucaena wood production trials in Hawaii.Leucaena Research Reports 1: 55

  22. 22.

    Walker TS (1987) Economic Prospects for Agroforestry Interventions in India's SAT: Implications for Research Resource Allocation at ICRISAT. Resource Management Program Economics Group. Progress Report No. 79, Mimeo

  23. 23.

    World Bank (1988) Kenya Forestry Subsector Review, Vol. I–VI, Report No. 6651-KE. Agriculture Operations Division, East Africa Department, Washington DC

Download references

Author information

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Stone, S.W., Kyle, S.C. & Conrad, J.M. Application of the Faustmann principle to a short-rotation tree species: an analytical tool for economists, with reference to Kenya and leucaena. Agroforest Syst 21, 79–90 (1993).

Download citation

Key words

  • Faustmann principle
  • bioeconomics
  • dynamic optimization
  • leucaena production
  • Kenya